Exhibit 10.13
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
600 TELEPHONE AVENUE
ANCHORAGE, AK 99503
January 23, 2004
Mr. Sheldon Fisher
3905 W 90TH Street
Prairie Village, KS 66207
Re: Employment Agreement
Dear Mr. Fisher:
This letter agreement ("Agreement") sets forth the terms and
conditions of your employment with Alaska Communications Systems Holdings, Inc.
(hereinafter "ACS" or the "Company"), effective as of February 23, 2004
(hereinafter, the "Effective Date" or "the commencement of your employment with
ACS").
1. EMPLOYMENT AND SERVICES. ACS hereby employs you as Sr. Vice
President, Sales and Marketing (hereinafter "Executive" or "you"), for the
period beginning on the Effective Date and ending upon termination pursuant to
paragraph 4 (the "Employment Period"). During the Employment Period, you shall
render such services to the Company and its affiliates and subsidiaries as the
Boards of Directors of Alaska Communications Systems Group, Inc. and Alaska
Communications Systems Holdings, Inc. and its subsidiaries (hereinafter "Boards
of Directors") shall reasonably designate from time to time, and you shall
devote your best efforts and full time and attention as an Executive Officer to
the business of the Company. "Executive Officer" for the purpose of this
Agreement is defined as a controlling officer reporting to the CEO or, in the
event that the CEO assumes a non-operational function, the most senior executive
responsible for business operations, with initial responsibilities as outlined
in Appendix A, with the authority and responsibility to direct areas of the
Company's business under the direction of and as assigned by the CEO, Boards of
Directors, or both. Authority extends to operational decision making and goal
setting for assigned responsibilities and accountabilities of the business as
required by and to support the company strategy and achievement of corporate
goals.
2. COMPENSATION. The Company shall pay you an annual base salary
("Annual Base Salary") of $250,000 during the first year of the Employment
Period, subject to annual review in each year of the Employment Period
thereafter (for any partial year during the Employment Period, the Annual Base
Salary shall be prorated based on the number of days during such year on which
you are employed by the Company). Your Annual Base Salary may be increased in
years following the first year of employment but may not be decreased. As used
herein, the term "Annual Base Salary" refers to the Annual Base Salary as so
increased. Such Annual Base Salary shall be payable in installments in
accordance with the Company's regular payroll practices.
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In addition, you will be eligible to receive an annual bonus
to be awarded ninety (90) days after the end of each fiscal year, to be paid as
soon as practicable but not later than one hundred twenty (120) days after the
end of the fiscal year. In order to determine the amount of such bonus, the
Company, acting in good faith, shall determine appropriate Company business
targets for each fiscal year and your annual bonus shall be based upon 100%
attainment of such targets. As a benchmark for such bonuses, the Company agrees
that if the Company attains the mutually determined business targets, you shall
receive a bonus equal to one hundred percent (100%) of your Annual Base Salary
as in effect with respect to any such fiscal year, and in the event that the
Company exceeds or does not exceed the business targets, there shall be
appropriate adjustments in the amount of your annual bonus as provided for in
the Executive Bonus Plan and any subsequent revisions. The determination of
appropriate business targets shall take place not later than sixty (60) days
subsequent to the commencement of the Company's fiscal year, and all Business
targets shall be provided in writing to you within thirty (30) days of the
Company's determination of said business targets.
HIRING BONUS. Within thirty (30) days of the commencement of
your employment with ACS you shall receive a hiring bonus of $100,000. In the
event of voluntary termination within twelve consecutive months of the
commencement of your employment with ACS, you will be required to repay a
pro-rated amount of the hiring bonus equivalent to one-twelfth of the total for
each month not served in the first twelve-month period of employment.
EQUITY PACKAGE. You will receive a total of 200,000 Alaska
Communications Systems Group, Inc. (ALSK) stock options with an exercise price
equal to the fair market value of ALSK stock on the commencement date of your
employment and having a term of 10 years. Options shall vest at 20% or 40,000
shares per twelve-month period for the five-year period starting with the
commencement of your employment with ACS or on a Change in Control, whichever is
earlier. Vesting ceases and the term of unvested options lapse upon termination
of employment for any reason. Upon termination of employment, vested options may
be exercised for the applicable period provided for in the applicable plan.
3. BENEFITS. During the Employment Period, you shall be entitled
to participate in the Company's fringe benefit plans, subject to and in
accordance with applicable eligibility requirements, such as life and disability
insurance plans and all other benefit plans (other than severance plans or
arrangements which are provided for herein) generally available to the Company's
Executive Officers, including vehicle allowance and relocation of personal
residence benefits except as with respect to relocation of personal residence
benefits upon termination of Executive's employment, in which case, Section 4
herein will govern. Relocation of personal residence benefits will be provided
in the event that your work location is moved more than forty (40) miles from
the ACS Headquarters, as in place on the Effective Date of this Agreement, and
you elect to move within three (3) months of assignment of a new work location.
4. TERMINATION AND SEVERANCE. The Employment Period shall
terminate on the first to occur of:
a. thirty (30) days following written notice by you to the
Company of your resignation without Good Reason, (it being
understood that you will continue to perform your services
hereunder during such thirty (30) day period),
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b. thirty (30) days following written notice by you to the
Company of your resignation with Good Reason during the
Employment Period, or ninety (90) days following a Change in
Control (it being understood that you will continue to perform
your services hereunder during such ninety (90) day period),
c. your death or Disability,
d. a vote of the Boards of Directors of Alaska Communications
Systems Group, Inc., or Alaska Communications Systems
Holdings, Inc. or in the event the Agreement is assigned to a
subsidiary, the applicable Board of Directors, directing such
termination for Cause,
e. a vote of the Boards of Directors of Alaska Communications
Systems Group, Inc., or Alaska Communications Systems
Holdings, Inc. or in the event the Agreement is assigned to a
subsidiary, the applicable Board of Directors, directing such
termination without Cause,
f. the fifth anniversary of the Effective Date (the "Scheduled
Expiration Date"); provided, however, that the Scheduled
Expiration Date shall be automatically extended for successive
one-year periods unless, at least ninety (90) days prior to
the then-current Scheduled Expiration Date, either the Company
or you shall give written notice to the other of an intention
not to extend the Employment Period, or
g. the termination of Alaska Communications Systems Group, Inc.,
Alaska Communications Systems Holdings, Inc. or in the event
the Agreement is assigned to a subsidiary, the applicable
company's business operations.
In the event of termination of the Employment Period pursuant to the
above defined clause (b.), (e.), (g.), or pursuant to clause (f.) as a result of
the Company's notice to you of an intention not to extend the Employment Period,
the Company shall concurrently with such termination pay to you a sum equal to
one times your Annual Base Salary plus one times your target annual bonus
payment, established pursuant to Section 2 hereof, payable in twelve consecutive
equal monthly installments. You shall also be reimbursed for the cost of
continuing your health insurance coverage under COBRA for the twelve (12) month
period following such a termination.
In the event of termination of employment pursuant to the above defined
clause (b.), (c.), (e), (g.), or pursuant to clause (f.) as a result of either
the Company's or the Executive's notice of intention not to extend the
employment agreement, the Company shall provide personal travel for you, your
spouse and dependent family members and transport of household belongings to a
maximum of $50,000, if you or, in the event of your death, your spouse or
dependent family members, elect to relocate to the lower 48 states within three
(3) months of such termination. In the event of Executive's death, the
relocation benefit contained in this paragraph will be provided to Executive's
spouse and dependent family members.
Except as otherwise set forth in this paragraph 4 or pursuant to the
terms of employee benefit plans in which you participate pursuant to paragraph
3, you shall not be entitled to any compensation or other payment from the
Company in connection with termination of your employment hereunder.
ACS may repurchase any ACS stock acquired through the exercise of stock options
or otherwise received by Executive at the lower of the price paid by Executive,
the price on the date of grant (in the case of any stock grant) or the then fair
market value of the stock, only if Executive is in
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material breach of duties and responsibilities or Executive has been terminated
for Cause. Material breach is defined as a substantial failure on the part of
the Executive to perform, consistent with the definition of Executive Officer as
provided in Section 1 of this Agreement, or the duties and responsibilities as
assigned by the CEO, Boards of Directors, or both consistent with this
Agreement. Executive shall not be obligated for the value of shares sold prior
to receiving notice of ACS' demand to repurchase stock under the provisions of
this Agreement.
For purpose of this agreement, the following definitions will apply:
(a) Good Reason" shall mean: (i) the assignment of you by the
Company to a position with a title and duties that are materially
inconsistent with or a material diminution of your role of Executive
Officer, it being understood that the addition or reassignment of
duties and responsibilities or change of title as deemed necessary for
the operation of the business by the Executive Officers of the Company,
including you, shall not, in and of itself, constitute Good Reason for
purposes of this paragraph; or (ii) the transfer, without your
concurrence, of your principal place of employment to a geographic
location more than 100 miles from both your current personal residence
and from the location of your current principal place of employment;
(b) "Cause" shall mean: (i) your willful failure to comply with
lawful directions of the Boards of the Company that is not cured within
thirty (30) days of Executive's receipt of written notice from either
the Board of the Company or of its subsidiaries, of Executive's
specific failure to perform lawful directions; (ii) a willful or
knowing material misrepresentation to the Boards of the Company or a
conviction or guilty plea to a felony or a misdemeanor involving fraud,
dishonesty, or moral turpitude; or (iii) a material breach of this
Agreement (other than due to physical or mental illness) that is not
cured to the extent deemed capable by the Board within its reasonable
discretion within thirty (30) days after receiving written notice from
either the Boards of the Company or of the Subsidiary of your specific
failure to perform your duties;
(c) "Change in Control" shall mean: (i) the acquisition by any
person or group (as that term is used in Regulation 13D under the
Securities Exchange Act of 1934, as amended), other than Fox Paine &
Company, LLC or any of its affiliates, of beneficial ownership of a
majority or more of the Company's outstanding voting securities; or
(ii) any sale, lease, exchange or other transfer in one transaction or
a series of selected transactions, other than a transfer to an entity
which is majority controlled by Fox Paine & Company, LLC or any
affiliate thereof or an entity with substantially the same equity
holders as immediately prior to such transfer, of all or substantially
all of the assets of the Company or its operating subsidiaries (taken
together), or any plan for the liquidation or dissolution of the
Company; and
(d) "Disability" shall mean that, for a period of six (6)
consecutive months in any twelve (12) month period, you are incapable
of substantially fulfilling the duties of your positions as set forth
in paragraph 1 because of physical, mental or emotional incapacity
resulting from injury, sickness or disease. Any question as to the
existence or extent of the Disability upon which you and the Company
cannot agree shall be determined by a qualified, independent physician
agreed to by the Company and by you or in the event of
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your incapacity, your guardian, within ten (10) days of written notice
by either party. The determination of any such physician shall be final
and conclusive for all purposes; provided, however, that you or your
legal representatives shall have the right to present to such physician
such information as to such Disability as you or they may deem
appropriate, including the opinion of your personal physician.
(e) "Potential Transaction" shall mean any merger, acquisition,
disposition, joint venture, partnership, strategic alliance, ownership,
partial ownership, lender or borrower relationship or relationship of
significant control or influence with any party.
5. CONFIDENTIAL INFORMATION. You acknowledge that information
obtained by you while employed by the Company concerning the business or affairs
of (i) the Company, its affiliates and subsidiaries or (ii) any enterprise which
is the subject of an actual or Potential Transaction, considered, evaluated,
reviewed or otherwise made known to you by the Company, its affiliates or
subsidiaries ("Confidential Information") is the property of the Company. You
shall not, without the prior written consent of the Company, disclose to any
person or use for your own account any Confidential Information except (i) in
the normal course of performance of your duties hereunder, (ii) to the extent
necessary to comply with applicable laws, or (iii) to the extent that such
information becomes generally known to and available for use by the public other
than as a result of your acts or omissions to act. Upon termination of your
employment or at the request of the Company at any time, you shall deliver to
the Company all documents containing Confidential Information as relating to the
business or affairs of the Company that you may then possess or have under your
control.
6. NON-COMPETITION; NON-SOLICITATION.
a. NON-COMPETITION. You acknowledge that you are and
will be in possession of Confidential Information and that your services are of
unique and great value to the Company. Accordingly, from the Effective Date
until the expiration of the period ending twelve (12) months from the date of
the termination of your employment with the Company or its affiliated companies
(the "Non-Compete Period"), you shall not directly or indirectly own, invest
(equity or debt) in, manage, control, participate in, consult with, advise,
render services to, or in any manner engage in, or be connected as an employee,
officer, partner, director, consultant or otherwise with, (i) any enterprise
engaged in the provision of telecommunications services in the state of Alaska,
or (ii) any enterprise that is engaged in the provision of telecommunications
services and is the active subject of a Potential Transaction in which you are
directly involved or have material knowledge at any time prior to the
termination of this Agreement (a "Competitive Business"). Nothing herein shall
prohibit you from being a passive owner of not more than one percent (1 %) of
any publicly traded class of capital stock of any entity engaged in a
Competitive Business..
b. NON-SOLICITATION. During the Non-Compete Period, you
shall not directly or indirectly induce or attempt to induce any employee of the
Company or its affiliates or subsidiaries to terminate, or in any way interfere
with, the relationship between the Company or its affiliates or subsidiaries and
any employee thereof, nor shall you directly or indirectly solicit or attempt to
solicit business from any customer or supplier of the Company or its affiliates
or subsidiaries.
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c. SCOPE OF RESTRICTION. If, at the time of enforcement
of this paragraph 6, a court shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum duration, scope or area reasonable
under such circumstances shall be substituted for the stated duration, scope or
area.
7. SURVIVAL. Any termination of your employment or of this
Agreement shall have no effect on the continuing operation of those provisions
that by their nature performance continues beyond the term of this Agreement,
including Sections 4, 5 or 6 for the periods specified therein.
8. INDEMNIFICATION. The Company agrees to indemnify you and hold
you harmless from any and all claims arising from or relating to your status as
an employee, officer, Executive Officer, director or agent of the Company, its
affiliates, or subsidiaries, to the fullest extent permitted by Delaware law
other than claims arising from your gross negligence.
9. WAIVER OF CLAIMS. You agree as a condition to your receipt of
any termination or severance benefits pursuant to Section 4 hereof, you will
agree to waive, discharge and release any and all claims, demands and causes of
action, whether known or unknown, against the Company, its affiliates and
subsidiaries, and their respective current and former directors, officers,
employees, attorneys and agents arising out of, connected with or incidental to
your employment or other dealings with the Company, its affiliates or
subsidiaries, which you or anyone acting on your behalf might otherwise have had
or asserted and any claim to any compensation or benefits from your employment
with the Company or its affiliates (other than pursuant to the terms of this
Agreement or of any employee benefit plans set forth in paragraph 3 hereof)
provided, however, that in no event will you have to waive any claims you may
have under section 8 above.
10. GOVERNING LAW. This Agreement and all questions concerning the
construction, validity and interpretation of this Agreement shall be governed by
and determined in accordance with the internal law, and not the law of
conflicts, of the State of Delaware. All disputes between ACS and Executive
(whether contractual or otherwise, including, without limitation, disputes
relating to or arising under or by reason of this Agreement or the other
agreements referred to herein) must be resolved by binding confidential
arbitration held within thirty (30) miles of Executive's place of employment,
specific location to be selected by the Board of Directors of Alaska
Communications Systems Holdings, Inc. Such arbitration shall be conducted in
accordance with the rules of the National Rules for Resolution of Employment
Disputes of the American Arbitration Association (the AAA) and judgment on the
award rendered in such arbitration may be entered in any court having
jurisdiction. Nothing in this Agreement shall restrict the right of ACS or its
affiliates to seek injunctive relief arising out of any violation by the
Executive of this Agreement. This Agreement is intended by ACS and Executive to
be a binding and completely integrated agreement superseding all prior and
contemporaneous promises, representations, offers, contracts and agreements
between ACS and Executive. This Agreement may not be amended except in writing
executed by Executive and the Chairman of the Boards of ACS (or other Boards'
authorized designee). This Agreement shall only be binding on ACS and Executive
if and when both parties have executed the Agreement in counterparts.
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11. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given, if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address set forth herein, or such other
address as may hereafter be furnished to the other party by like notice.
Notice or communication hereunder shall be deemed to have been received on the
date delivered to or received at the premises of the addressee if delivered
other than by mail, and in the case of mail, upon the depositing of the same in
the United States mail as above stated (as evidenced, in the case of registered
or certified mail, by the date noted on the return receipt.) Notices shall be
addressed as follows:
If to the Executive: Mr. Sheldon Fisher
c/o Alaska Communications Systems
600 Telephone Avenue
Anchorage, Alaska 99503
If to the Company: Alaska Communications Systems Group, Inc.
600 Telephone Avenue
Anchorage, Alaska 99503
Attention: President & CEO
with a copy to: Fox Paine & Company, LLC
950 Tower Lane
Suite 1950
Foster City, CA 94404
Attention: W. Dexter Paine
12. SEPARABILITY CLAUSE. Any part, provision, representation or
warranty of this Agreement, which is prohibited, or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.
13. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF AGREEMENT. This
Agreement shall bind and inure to the benefit of and be enforceable by the
parties hereto and the respective successors and assigns of the parties hereto.
As used in this Agreement, "Company," and "ACS" shall mean the Company, and ACS
as hereinbefore defined and any subsidiaries and successors to their businesses
and/or assets which assume this Agreement by operation of law, or otherwise.
This Agreement is personal to you and without the prior written consent of the
Company shall not be assignable by you otherwise than by will or the laws of
descent and distribution.
14. WAIVER. The failure of any party to insist upon strict
performance of a covenant hereunder or of any obligation hereunder, irrespective
of the length of time for which such failure continues, shall not be a waiver of
such party's right to demand strict compliance in the future. No consent or
waiver, express or implied, to or of any breach or default in the performance of
any obligation hereunder, shall constitute a consent or waiver to or of any
other breach or default in the performance of the same or any other obligation
hereunder. No term or provision of the Agreement may be waived unless such
waiver is in writing and signed by the party against whom such waiver is sought
to be enforced.
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15. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties hereto with respect to the subject matter
contemplated herein and supersedes all prior agreements, whether written or
oral, between the parties, relating to the subject matter hereof. This Agreement
shall not be modified except in writing executed by all parties hereto.
16. CAPTIONS. Titles or captions of paragraphs contained in this
Agreement are inserted only as a matter of convenience and for reference, and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision hereof.
17. COUNTERPARTS. For the purpose of facilitating the execution of
this Agreement, and for other purposes, this Agreement may be executed in any
number of counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the date first above written.
Please execute the extra copy of this letter Agreement in the
space below and return it to the undersigned at the address set forth above to
confirm your understanding and acceptance of the agreements contained herein.
Very truly yours,
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
BY: /s/ Liane Pelletier
-------------------
Name: Liane Pelletier
Title: President & CEO
Accepted and agreed to:
/s/ Sheldon Fisher
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Sheldon Fisher
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APPENDIX A
PRIMARY RESPONSIBILITIES: SR. VICE PRESIDENT, SALES AND MARKETING
Upon hire, you shall be the senior officer of the company with responsibility
for:
a. Business Sales and Service
b. Consumer Sales and Service
c. Marketing
d. Product Management
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